Key underwriting details for the Home Affordable Refinance Program (HARP) are anticipated to be available in mid-March. This program is intended to help people refinance homes that would not previously have qualified under the old system. To find out if a home qualifies for this program, homeowners can go to the following links:

For those who have managed to stay current on their mortgage, there are some additional eligibility requirements. The loan must be a Freddie Mac or Fannie Mae loan that was sold on or before May 31, 2009. The loan-to-value ratio must be greater than 80%. Click here to find out more about eligibility requirements for HARP.

Nina Penny, Arizona loan officer, stated, “Not all mortgage service providers participate in HARP. People may also be confused as to whether their home qualifies. I personally have offered to look up homes for my customers to help them discover if their home qualifies.”

To find out if a loan qualifies for this program, check the above links. If the home loan is listed on the site, then contact a participating mortgage service provider. More information may be obtained by contacting HARP at 888-995-HOPE (4673).

Many consumers have taken a financial hit with the recent economic climate. As more people are defaulting on their home loans, it is interesting to see the impact on FICO scores.

What may be a surprise is how many wealthy people with good credit are going into foreclosure. A recent article by the Arizona Republic mentioned how affluent, savvy homeowners are choosing to default on their home loans based on weighing the pros and cons to such a decision. “Recent research suggests that affluent people tend to be the main strategic defaulters, and these individuals are also the ones who would sustain more serious credit-score damage. This chart shows the resulting credit scores for two hypothetical consumers – one with an average initial score of 680 on the FICO scale and another with a high initial score of 780.”

The savvy homeowner that sees their home investment as a money pit, may go ahead and buy what they perceive as a better home purchase, perhaps a short sale, before they default on their original investment. In this way, they have good credit to purchase the new home before they take the hit to their credit score caused by the default of their original home purchase.

In recent research published in the journal Social Science Research, the data showed that young adults aged 18-27 actually felt empowered by having debt. They felt that it increased their self-esteem and made them feel in control of their lives. Because they were able to attain goals of buying things, they perceived this as a good thing.

ScienceDaily reported, “The study involved 3,079 young adults who participated in the National Longitudinal Survey of Youth 1979 — Young Adults sample. The NLSY interviews the same nationally representative group of Americans every two years. It is conducted by Ohio State’s Center for Human Resource Research on behalf of the U.S. Bureau of Labor Statistics.”

The young adults who had less money to begin with, felt more empowered by this new found ability to purchase things. “Results showed that those in the bottom 25 percent in total family income got the largest boost from holding debt — the more debt they held, both education and credit card, the bigger the positive impact on their self-esteem and mastery.”

The study found that as young adults became older, they had a more realistic idea of what this debt was doing to their lives. By age 28-34, the stress caused by the debt was starting to be felt.

The results of this study back up what has been called a movement toward an instant gratification society. The Arizona Republic reported, “Many young adults might feel good about incurring debt because it lets them purchase desired items without having to delay gratification. They are happy they can actually get credit and feel more like adults now. . .But they don’t actually understand what that entails.”

Eventually the bills start piling up and these young adults will have to face the consequences of paying off what they have charged.

How did this generation get to this point? Lack of education may be to blame. Here is a reprint of an article I wrote several years ago that addressed this problem:

Lack of Education to Blame for Financial Crisis

The current financial crisis is entirely our fault. We are a nation of financially-ignorant people doing crazy things like buying a $450,000 home on a $40,000 a year salary with a 120% loan. How in the world did we think that this was OK? What are we doing to be sure that this won’t happen again? People are sick of reading about bad news and the economy. They’d rather just put their heads in the sand and hope Obama is here to save the day. Well I’m here to tell you, if we don’t change the way we teach personal finance to the youth in our country, we will have learned nothing from this economic disaster and future generations are doomed to repeat our mistakes.

FROM AN EDUCATOR’S PERSPECTIVE

Having taught college business students for many years, I am horrified by the lack of personal finance training our youth receives. Should it be up to the young adult to learn this on their own? There are a lot of books on personal finance out there. If you hang out at a bookstore and watch the type of people who are reading them, however, you will notice it is not the young generation purchasing them. It is usually the 30 and older crowd that has now found themselves in financial straits and want to know how to get out of it. The younger generation doesn’t realize that they need this knowledge yet. Their parents probably never taught them because they probably have a limited understanding of personal finance themselves. How can we expect parents to teach children something they never learned in the first place?

Shouldn’t personal finance be something we learn in high school and college to prepare us for our financial futures? Arizona State University’s W.P. Carey School of Business has a good reputation. I use that as an example because that is where I received my BS in Business. Business Week lists ASU in its 2007 rankings as 66th out of the top 100 business schools. I am not trying to pick on ASU because it is a wonderful school. However, last semester they offered only one course that addressed personal finance and retirement planning. Only three sections of this course were even offered. For one of the largest business schools in the US, there was not much of a focus on educating our youth to be financially savvy. ASU only required that business minors take this course.

I recently ordered the textbook that ASU uses for this course. I love to read all I can read about personal finance; I realize that I am not typical in that regard. However, even with my keen interest in the subject, just looking through this text, I was so bored! If I see the words “net present value of money” . . . even I want to run. I just don’t think that it teaches the types of things young people need to know in a way that would spark their interest. This text is busy with charts, pictures, numbers and balance sheets. A young adult that isn’t savvy in math might get immediately turned off by that. To be fair, this course is offered to business majors who are probably decent in math. However, what about the rest of the students who are not? Why are we only teaching personal finance to business majors? Granted, it is a class that is open to everyone, but it is not required. To me, this text would be a “next level” type of teaching tool for those who understand the basics already. Unfortunately if ASU is typical of what other schools offer, they are missing the boat of what it takes to reach the average student.

Even if some form of money management is taught before college, part of the problem stems with allowing kids to be able to advance through school without passing tests to prove their personal finance knowledge. Dr. Danielle Babb, author, entrepreneur and professor who appears frequently on national television and radio claims, “Kids shouldn’t be allowed to move on if they haven’t mastered the basics.” Unfortunately many are learning about finance the hard way. Right now that may be through watching the collapse of the current economy. As Dr. Babb pointed out, “Right now an entire generation is learning about markets; that they don’t just go up – they can go down, too.”

Paula Zobisch, Ph.D., a well-respected professor who teaches business at ten online universities, agreed that this issue needs to be addressed. When asked how she felt about the personal finance education that our youth is receiving she responded, “Sure, let us lean on the high educational institutions to teach financial management, but let us not also forget high school. And even more importantly, let us remember parents who could teach financial management by giving younger children an allowance and then guiding the management of that allowance. Financial management begins long before college.”

This is not to say that more colleges and universities aren’t realizing the importance of teaching personal finance. In fact, universities such as Lynn University, University of Cincinnati, Kent State, Fairfield University, Scripps College and Texas State all are among the colleges offering courses in personal finance and money-management. However, some universities have had some convenient relationships with credit card companies which seem at odds with teaching fiscal responsibility.

New York Times recently featured a story about how colleges profit from marketing credit cards to their students. Michigan State University came under fire as it was noted that they allowed Bank of America to offer advertising items to their students to sign up for banking and credit services. In fact, according that the New York Times (2008) “Bank America’s relationship with the university extends well beyond marketing at sports events. The bank has $8.4 million, seven-year contract with Michigan State giving it access to the students’ names and addresses and use of the university’s logo. The more students who take the banks’ credit cards, the more money the university gets. Under certain circumstances, Michigan State even stands to receive more money if students carry a balance on these cards.”

If we step back to look at our children’s personal finance education even before college, it is interesting to check out the National Standards (2007) in K-12 personal finance education. The standards define financial literacy as “the ability to use knowledge and skills to manage one’s financial resources effectively for life time financial security”. The standards include areas such as financial responsibility, planning and money management, credit card and debt, as well as saving and investing. Some of the 12th grade goals include having the ability to “analyze how economic, social-cultural, and political conditions can affect income and career potential” as well as “explain the effect on take-home pay of changing the allowances claimed on an employee’s withholding allowance certificate (IRS form W-4). What they don’t really cover is how much time they are devoting to these topics.

The National Standards are created by the JumpStart Coalition for Personal Financial Literacy in Washington, DC.

There are educators and organizations set up that are trying to do something about educating our youth. The DuPont Fund is one of these organizations. In 2008 this organization created a presentation to increase awareness of the lack of financial literacy. In that program, the author addressed the areas that required attention. “There are three parts to a successful financial literacy education program. (1) Quality Financial Education Products (2) Qualified and Trained Financial Educators (3) Evaluation Program in Place to Measure Results” (Lindfield, 2009). If we do not have quality financial education products, then we are limiting the educators’ ability to reach this group of students.

FROM A YOUTH’S PERSPECTIVE

Having two grown daughters and after teaching for 6 different universities online, I personally have not found too many students who can meet many of the required standards. If we have set guidelines for what seems to be admirable goals in educating our youth, why haven’t the graduating high school and college seniors learned these important lessons? There are several reasons. These schools may only be devoting a small amount of time to very important topics. It is also quite possible that personal finance is the last thing on their minds while attending school. They can’t even relate to it yet. Lastly, when and if they actually do receive personal finance training, it is usually in a format that is hard for them to digest.

Many financial websites like Charles Schwab’s have some interesting statistics on how our youth view the importance of personal finance training. “Among the ideas tested, young people believe providing incentives for states to mandate financial education in schools is the most important step the Obama Administration can take to improve financial literacy.” (Schwab, 2009). In fact, studies are showing that facing future demands without a financial education is a source of serious concern for young adults. “Seven in 10 (71%) are “very concerned” about the country’s economic future. More than half (53%) are “very concerned” about their personal financial future” (Schwab, 2009).

Part of the problem with educating our youth about personal finance is that books on the subject are written in an unfriendly or boring manner. Even the books that are aimed at a young audience can be in question and answer format or simply read like text books. When something is so far-removed from what they deal with on a daily basis as personal finance is in those early years, it must be taught in a way that allows young people to picture themselves in situations that they could relate to. It’s critical to sell them on the idea of the importance of understanding personal finance.

Having been in sales for over 25 years, I learned many tricks for things to do to “sell my point” so that customers would want my solution. When I was in pharmaceutical sales, part of my sales training was to paint a picture in the doctor’s mind. If our youth is taught personal finance through picture painting or storytelling, perhaps they will learn more. Techniques like placing images in their heads are important for the person to get the point you are trying to get across. If I told the doctor to prescribe my drugs because they were good, I got nowhere (this is what the traditional personal finance book does). If I told them that their patient would be calling them at midnight complaining about migraines or inability to breathe if he didn’t prescribe my drugs, then he had a picture and more reason to do it because he didn’t want to be disturbed in the middle of the night. We need to paint the picture of why personal finance is important in students’ minds.

It is important to get the message of personal finance responsibility in front of the next generation so that they don’t end up the way previous generations are now, having to file bankruptcy or losing their homes. By targeting our high school and college students with education that delivers the message in a picture-painted storytelling format to explain the importance of personal finance, perhaps the next generation will avoid the tragedies that we are all dealing with now. To do this, we need to focus on creating educational materials that are delivering the message in a way that allows us to meet the standards that we have set for our youth.

FROM A POLITICAL PERSPECTIVE

Every day there is another article or news story about families facing foreclosures or bankruptcy. According to Realty Trac there were more than 3.1 million foreclosures filed in 2008. Even if people were able to keep their homes, suddenly they are upside down, owing more than it is worth. We have over 3.5 million homeless people in the US. If we are fortunate enough to still have a job . . . that may be all we have. Those of us who had our retirement savings in a 401k are now wondering what we will do when we retire. As we watch our life savings dwindle away with the falling stock market, shouldn’t we be thinking about how we got here and how we could have avoided this in the first place?

RealtyTrac (2009) data shows a steep include in foreclosure activity.

There are foundations and coalitions that focus their attention on such issues. The New America Foundation addresses challenges facing future generations. Their site has had articles addressing the importance of utilizing what we have learned throughout this crisis to teach our youth. “Such moments of financial trouble are teachable opportunities for children and youth to learn about personal finance, and to improve their own money management skills. However, comprehensive strategies for educating children and youth about personal finance so that they can successfully navigate a complex financial market place have not yet emerged.” (Lopez-Fernandini & Murrell, 2008).

The problem is that changing the education system is no easy task. Proposals must be made. Money must be spent. I recently sent a letter to Arne Duncan with the U. S. Department of Education, explaining my concern about the current lack of personal finance education for our youth. I explained I would like to propose a solution. What did I get back? I received a form letter commending my interest in education but politely stating that I should check out the Excellence in Economic Education (EEC, 2009) program already in place. At the site, you can download current information about national programs currently in place. According to the EEC, there was $1,447,267 worth of appropriations available for 2008 allotted to personal finance education. Making grants available is a good start. But what about addressing the problems in the school’s curriculum?

Obviously the current programs are not working. If we are not open to looking at alternative solutions to our current lack of education our children are receiving, aren’t we doomed to repeat our past mistakes? I realize the government has its hands full with the current crisis. However, our government may need to learn from its past mistakes. Isn’t the definition of insanity doing the same thing over and over and expecting a different result? By not addressing the problems within our educational system, we are doomed to repeat our past mistakes.

Sites like HysterSisters have been popular for women who want to get together and discuss their menopause and hysterectomy-related issues. Now there is a site for people to utilize who may be considering plastic surgery. The site MakeMeHeal.com offers a variety of information including everything from post-surgical underwear choices to information about what products may be helpful to heal after specific surgeries.

If a patient is considering eyelid surgery (blepharoplasty) for example, they can go to the link specifically about that procedure to find out details about the surgery including how long it will take to recover, homeopathic remedies for pain relief, what other comfort products are available, and even what makeup works the best as camouflage.

Like the HysterSisters site, the MakeMeHeal site offers a message board. According to their site, “Our plastic surgery message boards are for all of us who want to talk, listen, share, help, and support fellow women and men interested in cosmetic surgery and non-surgical procedures. You can read messages without logging in. To post a message, please log in or register. It’s free…and being a member gives you access to important information.”

The site even offers a directory of doctors. Be aware that the doctors with a lot of information and recommendations may also be advertising on the site. It is important that you research any physician on additional sites. Patients can rate their doctors and even upload their own before and after pictures. There is a “create your photo album” option available for those interested in keeping track of several operations.

I recently asked Dr. Robert Spies, a board-certified plastic surgeon in Arizona what he thought about this site. Dr. Spies stated, “It’s an informative, easy-to-navigate website that provides excellent up-to-date information on the latest plastic surgery procedures.” For additional information about specific operations, see the following links from Dr. Robert Spies, MD at Arizona Plastic Surgical Center:

Arizona State University is just one of many major universities that have started to increase the number of online courses they offer. Within the next decade, ASU expects that 25% of their students will be exclusively taking virtual classes. ASU and other schools are keeping up with their learners’ desire to take online courses.

The Sloan Consortium, also known as Sloan-C, is an institutional and professional organization integrating online education into mainstream education. The consortium is committed to quality online education. The Arizona Republic reported, “According to an annual Sloan Survey of Online Learning at 2,500 colleges and universities, 29 percent of students took at least one course online in fall 2009, up from nearly 12 percent in fall 2003.”

In a recent webinar I created and delivered for Sloan-C, there was strong interest by educators to learn how to deliver effective online courses. There is no mistaking the popularity of online education. Even Bill Gates praised online learning in his 2010 Annual Letter stating, “A lot of people, including me, think this is the next place where the internet will surprise people in how it can improve things.” According to a recent survey by the Sloan Consortium, more than 5.6 million students took an online class last fall, which translates to about 30 percent of college students.

The days of thinking that online education is somehow inferior is changing. Arizona’s three main universities are all embracing online learning. ASU is ramping up their online program. University of Arizona (U of A) has nearly 30 degree programs exclusively available online; many of these programs are graduate-level. Northern Arizona University (NAU) has 63 exclusively online programs and anticipates a 10% growth increase per year.

Arizona universities are not the only major universities to get on board with online education. Some other very prominent universities that also offer online courses include:

New York University Online Degree: NYU offers a number of online programs through its School of Continuing Studies, including certificates and full master of science degrees (including an MBA) in business.

For-profit schools have been waiting to see the final version of the new gainful employment rule that was made public on Thursday. Many are relieved to see that the final design was not as strict as originally anticipated. However, how it actually impacts these schools won’t be truly known until next year when the U.S. Department of Education releases information about how students are paying off their loans.

Federal financial aid has been a big factor in financing students’ education. This has caused concern for-profit schools should this funding should be cut off.

The Arizona Republic Reported, “Under the gainful-employment rule, students can’t use federal aid for programs that fail three tests: at least 35 percent of former students in that program must be paying down their loan balance, the student loan payment must not exceed 30 percent of typical graduates’ discretionary income, or the annual loan payment does not exceed 12 percent of typical graduates’ total earnings. If a school’s program fails the test three times in four years, it is cut off from federal financial-aid funding. For the first time, starting in July, the rule requires schools to disclose total program costs, graduation rates, job placement rates, loan repayment rates and other information to students. Earlier versions of the rule had tougher student repayment standards, took effect faster and did not have the “three strikes” provision. The final version gives schools more time to correct deficiencies and makes it likely that fewer will lose access to federal student aid dollars.”

Today, March 18, 2011 the FREE YOB Fair will be held at the Shrine Auditorium at 552 N. 40th Street in Phoenix. I will have a booth there. I hope anyone in the Phoenix area will come stop by and say hello. Jerry Colangelo and Pat McMahon will be keynote speakers there. “YOB is a revolutionary collaboration of Arizona’s business owners, visionaries, leaders, community members and resources charging forward as one. Never before has there been a time and opportunity to come together and maximize our collective knowledge, experience, resources and success. YOB is the first large business fair in Arizona to exchange tools, opportunities, alliances, strategies and vision in one power-packed day.”

I will be available to answer questions about career change, online learning and how to utilize personality assessments in the workplace. Learn how to utilizing the ability to understand personalities to:

Inerview job applicants

Increase team productivity

Recognize how to get the most out of employees

Recognize how to deal with customers

Plus a lot more. If you would like to have a basic understanding of your Myers Briggs MBTI type, I will be able to give you some guidance today at the YOB Fair.

Entrepreneurs are often looking for ways to promote their new businesses. On March 18, the local YOB (Your Own Business) Fair will be a place where Arizona business owners can go to find out tips to help them promote their business. I will have a booth there and I hope you will join me. In the meantime, please check out some of the top networking tips that small businesses should be considering in order to succeed:

Find out where your customers are and connect to them through social networking. It is important to network with as many people as you can, but remember to try and focus on those that have connections. Spend some time looking through contacts on LinkedIn and Twitter to see who your friends and contacts know. Get into groups on sites like LinkedIn and start threads about topics that would be of interest to people you’d like to target as customers. Become an expert in the Q&A area on LinkedIn as well. Create Facebook pages for your company and products. Link your sites together so that your updates get posted to all of your social networking sites. If you don’t know where to begin to learn how to social network, check out letsgetsocial.com for a reasonably priced series of videos to show you how to become social-networking savvy. If you have the funds, you could hire a social media expert to do it for you.

Give people something so that they will want to come to your site. If you aren’t on Youtube, you need to be. Create several short (3-4 minute) videos offering people something for free and post them on Youtube. End your video with a link to your landing page to have them sign up for a free newsletter or some other free item. This will allow you to capture their email address and get them on your mailing list in a legitimate way. The videos do not have to be fancy. A simple video camera can create all you need. You can also make a PowerPoint presentation and then overlay it with Camtasia so that your file has your voice and presentation without necessarily having to have a video of your face if that makes you more comfortable. You can upload the file to Youtube and also link to it from your website and/or blog.

Ask for word of mouth. One of the best ways to get noticed is to have people talk about your business. If you aren’t asking your satisfied customers to tell other people about you, then you are missing the boat. Happy customers are usually more than willing to tell others about you if you ask them to do so. Many just haven’t considered it until it is brought up. Ask people if they know people who could use your service. If they do, ask them if they will tell people about you and give them your cards or flyers to give to these people. Remember to ask people to do things based on assessing their level of comfort. Part of connecting with others is to understand individual personalities.

Keep records of contacts you make. If you have a software package like ACT! or Outlook, you can keep notes there. Keep a record of everyone you meet and make notes about everything you know about them. Every time you meet someone new, find out something about them that you can write down into your file and bring up later. If you can figure out their birthday from Facebook, always send them a note saying “happy birthday”. Find reasons to stay in contact. Put notes into your calendar reminding yourself to drop a note, asking if the baby was born yet or how the wedding went. Showing an interest in people draws them closer to you. Avoid promoting your products and yourself in all outgoing messages. Make it be about them or give them information that helps them and makes them want to come back to you.

Be a resource or mentor. Find ways to offer your services for free to others and it will bring people back to you later. On LinkedIn, you can answer questions in the Q&A room to help others and get recognized. Join local groups and volunteer to do things to become noticed. People remember kindness and are more willing to give out your name to others if they associate you with good things.

Lesley Wright’s recent article in the Arizona Republic offered some insight into a new book by author and ASU professor Vincent Waldron. Waldron’s book, titled, “Communicating Emotion at Work”, due later this year, will include information from his 20 years of studying emotions in the workplace.

In the book, “It’s Not You It’s Your Personality” similar topics are covered in chapters about emotional intelligence and concern for impact. Concern for impact may be defined as how much we care about how others perceive us. In the Arizona Republic article, “Waldron argues that emotional communication should be a core employment skill.” Emotions are a buzz word in the workplace since Daniel Goleman helped increase the popularity of emotional intelligence with his book about why emotional intelligence could matter more than IQ. Books about emotions in the workplace can be a very effective tool to help explain why people act the way they do. This can be very important, especially in a team setting. As more companies are creating teams, understanding one’s fellow employees and their emotions can be critical to the success of a team and their projects.

Some of the things that Waldron pointed out in his interview with Wright tied into having concern for impact which can be an important part of one’s success in the workplace. Waldron claims, “The theme of this book is that emotions, both positive and negative, have in a sense evolved to serve a purpose. Emotional communication is a tool for making our organizations and our lives richer, more moral, more humane and potentially building better workplaces. Sometimes that means regulating and suppressing emotions. So we need to be competent at understanding the emotions and learning to regulate them. I’m sort of arguing for a heightened awareness of how emotion makes us good. I don’t think there is any competitive disadvantage to being emotionally competent.”

When considering a career move, people often find themselves paralyzed, worrying about making a mistake, causing career-suicide. Most of us have probably made some choices that may not have worked out the way we intended. However, looking back, much of what we learn through our mistakes actually may be excellent learning experiences that help us with our next job.

In Ross Hamilton’s 1951 book For Humans Only, he wrote the following line: We extract from life just what we give it . . . so with each mistake replace the divot. You don’t have to be a golfer to grasp his point. If we make mistakes in our life, we need to make amends and move forward. In case you hadn’t guessed, this line came from my father. He felt that we shouldn’t dwell too much on past mistakes.

You can’t change decisions you’ve made previously but you can do your best to take what you have learned and grow from those experiences. Even if you have a job that doesn’t last very long, you might make some excellent contacts that could help you with the next position. Those contacts may open doors that you may not have even considered.

If you over-analyze every decision you’ve ever made, you’ll drive yourself crazy. It may be best to look at disappointing career choices as learning experiences and realize that they may very well lead to something better down the road. Lamenting over the past or over things which you have no control, is a time waster.

Instead, look forward to the choices you have now. It can be helpful to write down the foreseeable pros and cons of any choice. This will help you visualize opportunities and threats associated with each alternative.

If you feel trapped in a career that you chose when you were young, it may be time to change. Perhaps the degree you were interested in when you were in your 20s no longer fits with your passion. You may need to consider going back to school to update your skills. It’s OK to admit that your interests have changed.

With the new year around the corner, many people are thinking about making a fresh start with their careers and their lives. What can you do differently to make this year better than last year? To truly be successful, having goals is important. I often recommend that people do a personal SWOT analysis to help them realize what they have to offer and what they need to work on. If you have never look at your own strengths, weaknesses, opportunities and threats, I suggest doing so as part of your plan to improve your new year. To find out more about a personal SWOT, click here.

I have been reading your posts for a while now. This one resonates with me because I am in the process of delving into previously uncharted waters of a career change. While it is so exciting, past mistakes can be debilitating to progress. Your father is a smart guy.